Clarification: Due to incorrect information provided to the Tennessean, the earnings for Atlanta Convention and Visitors Bureau CEO were understated in an earlier version of this story. He made $790,529 in fiscal 2016, which is $1,811 less than the CEO of the Nashville Convention & Visitors Corp.

Nashville's tourism industry has reached record heights since the early 1990s, when pawnshops and peep shows littered Lower Broadway.

CEO Butch Spyridon, who has been with the Nashville Convention & Visitors Corp. for 27 years, made ...more

CEO Butch Spyridon, who has been with the Nashville Convention & Visitors Corp. for 27 years, made $792,000 in 2017.

Shelley Mays / USA TODAY Network - Tennessee

And during the economy's latest surge, some of the industry's public and nonprofit leaders have made record-level salaries.

Music City Center CEO Charles Starks and Spyridon are now paid more than comparable executives in cities with much larger tourism industries across the U.S. — places including Orlando, Florida; Los Angeles; Las Vegas; and New Orleans, according to a survey of several selected locales.

Nashville’s travel and tourism industry has generated hundreds of millions of tax dollars and created more than 12,000 jobs in the past five years.

The “it city” economic explosion has brought large dividends to those in power, but the average travel and tourism worker's annual pay, at $37,000, remains among the lowest in Nashville's big industries.

Music City Center CEO Charles Starks made $399,000 in 2018 — $100,000 more than his highest-paid ...more

Music City Center CEO Charles Starks made $399,000 in 2018 — $100,000 more than his highest-paid counterpart in comparable cities.

File / The Tennessean

CEO pay climbed at marketing organizations across the US

Nashville competes for conventions with cities such as Indianapolis; Charlotte, North Carolina; and Austin, Texas, according to Music City Center's original market study. The Tennessean sent public records requests to those convention centers, in addition to Orlando, which has the second-largest center in the U.S. (Chicago is the largest. Nashville falls below the top 10.) Also, The Tennessean examined the earnings of convention center CEOs in Los Angeles and Anaheim, California.

For destination marketing organizations, The Tennessean examined public tax returns filed by more than eight comparable nonprofits, including those Spyridon named.

The analyses focused on take-home pay, and excluded health and retirement benefits, which varied widely.

Starks made more than executives who oversee other facilities as part of their portfolio, such as Indianapolis' Barney Levengood, who manages the Indiana Convention Center and the NFL Colts' Lucas Oil Stadium.

Spyridon’s pay exceeds that of CEOs with larger budgets and in cities with higher costs of living, including those in San Francisco and Los Angeles.

Across the industry, CEOs of destination marketing organizations have won large raises over the past five years as the economy strengthened and tourism sales picked up, said Mike Gamble, president and CEO of Searchwide Global, an executive recruiting firm that advises the board on Spyridon’s contract.

“Both of those salaries create equity and perception issues within the government,” said Emily Evans, a former Metro councilwoman and skeptic during Music City Center's development.

She pointed out that each makes more than the police chief, fire chief and head of the public health department. “Is the director of the convention center a life-or-death kind of job? It’s important, but if I had to rank them, I don’t think I’d put the convention center at the top of the list.”

Butch Spyridon, President and CEO of the Nashville Convention & Visitors Corporation talks about the growth of Nashville.

The Music City Center and the Nashville Convention & Visitors Corp. are funded largely by hotel room taxes. The visitors group receives 87 percent of its revenue from Metro hotel taxes, but officials there say Spyridon’s salary comes out of membership dues and other private sources only.

Those tax revenues would have never hit their current levels without the 2013 opening of Music City Center, proponents say, or the coordination between the two organizations' leaders.

"Nashville has benefited tremendously over the last almost two decades because of their dual leadership, which has led to economic growth and sales expansion beyond anyone's expectations," said Randy Rayburn, a restaurateur and member of the convention center's board of directors.

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Convention center sees mixed results

While the success of Nashville’s broader tourism industry is undisputed, the performance of the 5-year-old Music City Center is less clear. The organization had its highest attendance in fiscal 2016, according to annual reports, but then it declined the next two years on most key measures. The downturn came as the broader U.S. convention center industry also slowed.

Music City Center had lackluster results in 2017, but the agency awarded CEO Charles Starks a ...more

Music City Center had lackluster results in 2017, but the agency awarded CEO Charles Starks a $91,000 bonus.

Andrew Nelles / The Tennessean

The center’s executive committee voted to give Starks a $91,200 annual bonus after fiscal 2017. That year the center had lower attendance, fewer events, less economic impact and fewer hotel “room nights” booked than the previous year.

Those are the marquee measures promoted in the agency’s annual report, but they weren’t included in Starks’ performance review. Instead, he was measured on an internal sales goal, which he exceeded by 16 percent, and other metrics. He fell short of the goal for employee retention, but exceeded the center’s budget goal by cutting expenses and boosting revenue.

Other goals were less concrete, including one that encouraged “active participation in customer trade shows and events, site visits and familiarization tours.”

Starks declined to be interviewed for this story, but in his self-evaluation he wrote, “We continue to receive extraordinary comments from past and current customers during my visits regarding the Music City Center and the level of service they have received. It is very comforting to hear what our customers had to say about us, and in turn the word-of-mouth about the Music City Center and Nashville to fellow meeting planners.”

Attendance and room nights dropped in 2017, Rayburn said, because not enough luxury hotels participated in the center's room block — a constraint he said is beyond Starks' control.

"I can't blame him for the status of the marketplace," Rayburn said.

Starks made $100,000 more than his highest-paid counterpart in the other cities. Most of the others received no bonuses.

The Music City Center Executive Committee is required to consider “recent compensation surveys of comparable positions” each year, according to Starks’ contract, but there’s no mention of a salary survey in the July 2017 meeting minutes, when committee members approved his compensation plan.

The center's nine board members are appointed by the mayor and confirmed by the Metro Council. Five of them serve on the executive committee.

“What is being spent here are fundamentally tax dollars,” said At-large Councilman John Cooper, who has called for reforms to the tourism tax system. “Of course, we have an interest in them being well-spent.

“It’s always hard to know how to compensate government employees,” he continued. “They aren’t taking private sector risks, but often want to be paid on the private sector scale.”

Cooper has proposed that more hotel tax dollars be used to reimburse Metro for tourist-related expenses, which would free up funds for core needs, including police officers and schoolteachers. Hotel and sales tax revenue diverted to Music City Center has surpassed projections.

Tourism reaches a crescendo

Industry watchers say Spyridon, during his 27 years at the Convention & Visitors Corp., has played a key role in Nashville’s meteoric rise. He helped recruit the Titans in 1996, spearheaded the city’s popular Fourth of July and New Year's Eve celebrations, and helped land the 2019 NFL Draft and British Airways’ first flights from London.

“When you’re in sales and marketing,” Spyridon said in an interview, “you try to dangle a carrot out. That’s what the board has done for me.”

In the past few years the travel industry has reached a crescendo. Visitors to Nashville spent $6.5 billion in 2017, state officials say, up from $4.6 billion in 2012.

“Under Butch’s leadership, we have excelled across the board when you evaluate our performance with cities that are significantly larger,” said Beth Courtney, partner at the DVL Seigenthaler public relations firm and member of the Convention & Visitors Corp. board of directors.

Metro Nashville contracts with the nonprofit to market the city as a top destination for travelers. In exchange, the group gets a third of hotel room tax collections. Periodically, the contract is opened up for bidding, but the Convention & Visitors Corp. has always won the award. In fiscal 2017 the group received $25.3 million from Metro Nashville, according to its tax returns, out of $28.9 million in total revenue.

In the past five years, the CEO of the city-owned Music City Center, Charles Starks, saw his pay ...more

In the past five years, the CEO of the city-owned Music City Center, Charles Starks, saw his pay more than double to nearly $399,000. Another top Nashville tourism executive, Nashville Convention & Visitors Corp. CEO Butch Spyridon, also nearly doubled his earnings in five years, to $792,000.

Ayrika L Whitney/USA TODAY NETWORK - Tennessee

To retain Spyridon, a Vanderbilt University graduate now in his 60s, the board decided to hike his base salary and bonuses over the years. In fiscal 2017, it gave him a $308,000 bonus for hitting performance targets such as revenue and expense goals, board members said. Among his perks are paid memberships to social and health clubs.

“It’s a bit like the head football coaches across the country,” said Ronnie Smith, head of Regions Corporate Banking and chairman of the visitors organization's board. “You want to make sure you have an incumbent in the role who is creating results.”

Smith said the nonprofit hires outside consultants to conduct a salary survey and help determine the best CEO compensation package. The next highest paid CEO, among peers suggested by Spyridon, was William Pate at the Atlanta Convention & Visitors Bureau. He took home $790,529 in fiscal 2016, the most recent year with data available. That doesn’t include a one-time payout of deferred compensation.

One reason for the high compensation is Spyridon's long tenure at the organization, said Gamble, the board's salary consultant.

“If you were to go out there and look for a new CEO today, you probably wouldn’t start at Butch’s current salary,” he said.

Starks and Spyridon aren’t the only top nonprofit or government officials in Nashville who received raises during the economic boom.

Scott Ramsey, CEO of the Music City Bowl and the Nashville Sports Council, received $507,000 in 2017 for primarily organizing the postseason collegiate football game, which draws about 49,000 people.

That’s a 45 percent increase compared with his 2013 earnings, according to the group’s tax filings. Revenue from the Music City Bowl declined by 9 percent over those years.

Ramsey said his raises and bonuses were tied to securing a better bowl agreement, a long-term contract for the title sponsor and a television contract. He also said he signed a 12-year agreement to host the SEC basketball tournament in Nashville.

At the Nashville Area Chamber of Commerce, another nonprofit, CEO Ralph Schulz was paid $471,000 in fiscal 2017, up 4 percent from 2013.

Reach Mike Reicher at mreicher@tennessean.com or 615-259-8228 and on Twitter @mreicher.